Corporations leave the west at an amazing pace. Atleast there hiring does...

[DuncanK]

Originally posted by Imran Siddiqui

Only economists are concerned with man hours, because they know that when you produce things with less man hours you have a real increase in productivity.

Yeah, and productivity doesn't necessarily mean efficiency. An increase in productivity with the same costs does increase efficiency, but so does same output (even if much less productivity) with lower costs.

Imagine where you would plan to produce the goods if there were no corporations to seek profit and\or revenue. That is the most efficient place to produce the goods. You are more concerned with increasing profits, not the overall efficiency.

[Imran Siddiqui]

It's their system.

Sure they do, if it costs less to do so. To make up an example, if an American tree costs $50 and an Indonesian tree costs $5, you could waste five times as many Indonesia trees and still make more money than by using American trees.

And why would anyone waste trees? Ok, say we are talking lumber (the first thing I could think of with trees ). They may use one more tree to make the same thing, but the costs are much less with the same output, right?

Resources will count in the costs analysis, and the amount (or lack of amount) of them is reflected in their price.

[DanS]

You are more concerned with increasing profits, not the overall efficiency.

Yes, he is striving for capital productivity, a component of the overall productivity number.

[chequita guevara]

Consider buffalo hunting. Only certain cuts of meat and the hide were taken. Massively profitable, but an extremely wasteful use of the buffalo. But buffalo were so plentiful that you could shoot hundreds and merely take the choicest parts. The result, they wiped out the North American bison (for all intents and purposes).

That's what I mean by inefficient. If it takes ten times as many workers to make the same amount of product but with half the labor cost, it's not more efficient but it is more profitable.

[Lawrence of Arabia]

Che -

The next thing that is interesting is that you have changed your statement. From decreasing prices you now have gone to decreasing the rate of increase (and I'll buy the latter). This means, however, that when the savings were first realized, they were not passed along to the consumer. A pair of Air Jordans today cost $150US from Niketown. Not a substantial savings for a pair of shoes that cost approximately $15US to produce.

Decreasing prices is the same thing as decreasing the rate of increase. In general, due to inflation, your dollar will get worth less every year. When the price of one good remains equal from one year to the next, it will cost more. If the price of the good decreases from one year to the next, it will cost less. By cutting costs and going for cheaper labor, the price of the good has gotten cheaper (and it has also slowed down the rate of increase of the good due to inflation.)

[chequita guevara]

Originally posted by Lawrence of Arabia
Che -
Decreasing prices is the same thing as decreasing the rate of increase.

Only if you ignore time. Eventually the savings are passed on to consumers. In the mean time, the company pockets it.

[Az]

good debate, che.
*continues reading *

[DuncanK]

Originally posted by DanS
You are more concerned with increasing profits, not the overall efficiency.

Yes, he is striving for capital productivity, a component of the overall productivity number.

So we have an agreement. You all have been arguing that overseas production increases productivity, and we have been arguing that it decreases efficiency. Both are right. That happens very often here

[KrazyHorse]

Originally posted by DanS
Had to have started in the 80s

Here you are, in real $...

A good 10% increase.

?

No, from 1981-2000 it shows a 3% increase. It only shows a 10% increase if you start at 1991, after a decade of declines.

[KrazyHorse]

IIRC, in the same period corporate profits in the US increased 250%

i.e. capital's moving forward, labour's stuck.

[Ned]

Che, I compared your first post to everything you said thereafter. They are not consistent. In the first post you said that the globalization movement was not against globalization, but against the autocrats and in favor of the environment.

Thereafter, you simply defend labor in industrialized countries. People in the third world reading your post cannot be too happy. Globalization has done more for the third world than foreign aid ever done. This is a fact.

You failed to mention the environment. But this tends to be a major factor in the move of manufacturing offshore. Enviromental rules alone make some manufacturing in industrialized countries prohibitably expensive.

But the net result is a cleaner environment for America and the West. Isn't that what we want?

As to the environment offshore, at some point, of course, they too will begin to impose enviromental controls as stiff as they are here. At that time, affected industries will move again. There is no way to prevent it except if you had a world government.

But back to your first post. You said the anti-globalization movement was not against globalization - just the autocrats who conducted it? I'd like to know WTF you are talking about?

[Ned]

Che, A lot of what you post is pure fiction. Consider the disk drive. The move to offshore manufacturing began in the '80s and by the mid '90s was substantially complete. Has the price of a disk drive remained constant? No, it has dropped like a rocket. Why? - because costs are dramatically lower.

Any disk drive company that was ordered by their government or union or whatever to keep jobs in the West would very, very shortly be out of business. Why? - cost.

Note that TV prices are lower today, by half to a third, what they were 40 years ago. This is in current dollars. In adjusted dollars, the price must be 1/6th of what they use to be.

Explain that.

The cost to assemble the TV, plus the cost to make every component in it has fallen. Why? Because production costs are less.

Big labor is the enemy of progress. Big labor is the enemy of the third world. Big labor is an enemy to prosperity. Big labor is the enemy.

[KrazyHorse]

Ned, the thought that the majority of price decreases on any type of consumer electronics have resulted from moving production offshore is laughable on its face.

[chequita guevara]

Originally posted by Ned
Explain that.

As I also wrote, technology is a major exception. This has to do less with decreased labor costs and a lot more to do with changes in how electronics are made. Most circuitry today is designed on computers and etched by robots, rather than with slide-rules and by hand.

Che, I compared your first post to everything you said thereafter. They are not consistent. In the first post you said that the globalization movement was not against globalization, but against the autocrats and in favor of the environment.

Thereafter, you simply defend labor in industrialized countries. People in the third world reading your post cannot be too happy. Globalization has done more for the third world than foreign aid ever done. This is a fact.

Globalization has done more to the Third World, certainly. Taiwan's enivronment is wrecked, most of the world's fisheries are on the brink of collapse, bananas are going extinct, tropcial and boreal forests are being destroyed at an alarming rate, etc.

Of course I'm going to defend First World labor. In most cases, that's you and me and everyone else we know. Do you not think you are worthy of defense? Do you think that after our ancestors built up this country and these companies and corporations that they should simply dump us on the street and go elsewhere, destroying environments, corrupting governments, and murdering labor activists?

Like I wrote, I don't begrudge the Third World the jobs. I begrudge the First World corporations the devestation they wreak in both places.

You failed to mention the environment. But this tends to be a major factor in the move of manufacturing offshore. Enviromental rules alone make some manufacturing in industrialized countries prohibitably expensive.

So they claim. Pollution is simply an expense of production that is passed on to the community, i.e., it's an externalized cost. Environmental regulations make the company pay for the cost rather than the community. If you can't make a product without killing your neighbors, you shouldn't be in business.

But the net result is a cleaner environment for America and the West. Isn't that what we want?

In many cases, the damage has already been done. In other cases, I don't belive it's right for us to fob off our problems on some other country. We do not have the right to make ourselves cleaner by moving our pollution to another country. That's just evil.

As to the environment offshore, at some point, of course, they too will begin to impose enviromental controls as stiff as they are here. At that time, affected industries will move again. There is no way to prevent it except if you had a world government.

In other words, the envoironment around the world will get trashed instead of protecting it now while we still can.

But back to your first post. You said the anti-globalization movement was not against globalization - just the autocrats who conducted it? I'd like to know WTF you are talking about?

When there is a trade dispute between two members of the WTO, it is adjudicated behind closed doors, by members who are selected by governments, whose decisions are binding. If Malaysia thinks that it should be able to sell shrimp in the US caught using a method that is outlawed in the US (because it kills turtles), Malaysia goes to the WTO and gets our law overturned or collects from the US monetary damages.

[Ned]

Originally posted by Frogger
Ned, the thought that the majority of price decreases on any type of consumer electronics have resulted from moving production offshore is laughable on its face.

Frogger, if you were a manager of a business and your competitor's manufacturing costs were one half of your own because they had located their factory in a low cost area, what do you do?

I suggest you emulate your competitor or find some other way to lower costs.

C/E is a very broad topic. Let's just pick something that hasn't changed very much in 20 years. Let's pick 19" color TV sets and disk drives for desktop computers.

Twenty years ago, a 19" color TV set would cost anywhere from $400 to $800 depending on the cabinent. Today, those same TV sets sell for $100 to $300 depending.

Twenty years ago, a two-platter desktop disc drives cost $500 + and delivered a whopping 5-10 megabytes of storage. Today's two platter a desktop disk drive delivers 40-80 gigabytes of storage and costs $100-$200 dollars.

Certainly, the essential components of the TV sets and the disk drives then are the same as they are now. They simply cost less and are much better, for that matter.

But, why do the components cost less? They too are made offshore. Circuits, heads, disks, motors - all are made offshore.

What the US does, to the extent it still does anything in these industries, is design the TV or design the disk drive. Today's US worker is an engineer, a draftsman and of course, the sales force, accounting and the like. Gone are the assemblers. Those jobs, to the extent they still exist at all due to robotization, are located offshore.

Yes, even with extensive robotization, the manufacturing jobs will stay offshore for two reasons: enviromental laws and taxes.